Thursday, March 22, 2007

We all see ourselves as part of a community-- or usually, many communities. We draw circles around ourselves, including some people and excluding others-- sometimes they're big circles, sometimes they're small. We see others as like us, or different from us, and these comparisons inform the way we live. It's a lot like those Venn diagrams you probably learned about in grade school:In this example, the black dot in the middle is me. Some "communities," or groups, to which I belong, are the large group of all residents of New York City, the smaller group of upper middle class Ivy League graduates, and the very small group of people who live on my block. (Obviously the sizes of the circles aren't intended to be exactly proportionate to the real numbers of people represented.)Depending on the situation, I might think of myself as identified with these groups to varying degrees. Most days, I don't feel like I have a whole lot in common with the group "New Yorkers." New Yorkers are a pretty diverse bunch, and most of us feel no need to smile at each other on the subway and say "Hey, you live in this city too! Howya doin'!" But if I was in a small town in Uruguay and overheard someone saying they were from New York, I might say "Wow, I'm also from New York!" Of course I don't always consider myself "from" New York, or I might downplay that identification, for instance if I was with family in New England who were all watching a Red Sox game.We all have these shifting hierarchies of identity. We are citizens of the world, our country, our city, our apartment, or even just our corner of the room. So how does this relate to our financial lives?For every identification we make with some group, we position ourselves within that group by our income, our consumption, our possessions. We like to know where we stand against others-- are we richer or poorer, is our house bigger, is our car newer, do we have more or less saved for retirement. And we think things like, "well everyone around me in this community that I belong to goes on vacation every year, so I should be able to do that too." And studies have been done that show that people often feel happy or unhappy not so much because of their own financial status per se, but because it is higher (happy) or lower (unhappy) than that of the people around them.

I try to think about these issues a lot. In this blog, I often say things like "I pay $80 for a haircut, but that's not that bad by New York standards." Or "I love my tiny studio apartment but my friends can't believe I live in such a small space." Or "publishing is an underpaid industry." These are all "true" in some ways, but if you shift the context, they seem all wrong. Someone in Africa could live for months on what I pay for a haircut. And they probably live in far less space than my old studio apartment... but someone in London might think my studio was actually relatively luxurious for the price, given that housing is even more expensive there than it is in New York. And someone who works at McDonalds or Walmart would probably be thrilled to make a publishing salary. What about the fact that my net worth is much higher than the average American's? Does that mean I can just relax and say I'm doing well? What if I compare my net worth to those Ivy League grads? Suddenly it looks like I'm way behind.

So part of this rule comes down to

Judge yourself against your own standards and goals rather than comparing yourself to other people.

If my net worth and savings are on track to be able to pay for my kind of intended retirement lifestyle, it doesn't matter how it compares to anyone else. But that doesn't mean I shouldn't keep those comparisons in mind. It's important to

Have a social conscience.

It's a no-brainer that all Americans are fortunate in relation to others in the world, and some Americans are more fortunate than other Americans, and we should all keep that in perspective.Then there's that

Don't worry about keeping up with the Joneses

thing. Again, it's pretty much a no-brainer that you shouldn't just try to do or buy everything your neighbors do. But sometimes it's not the neighbors you need to worry about, it's your own inner Jones!

What you spend does not determine who you are; who you are doesn't have to determine what you spend.

That is the best way I can think of to put it. Don't box yourself in with your own notions of where you fit into the world. This doesn't mean you have to break all the usual rules, but don't let yourself feel too trapped by them. Realistically, this can be quite hard! I was brought up in a certain environment, reinforced by school and work amongst many other people brought up in similar or wealthier environments. I'm not just suddenly going to change all my standards. Am I going to wear rags and live in a camper van on the street just because it would save me money? I can comfortably answer "NO, because people like me just don't do that!" "People like me" being at least some of the inner circles below:But what about some less extreme examples? Maybe "people like me," i.e. well-educated, somewhat tech savvy, employed in media field, financially secure bloggers, tend to replace their computers more often than every 10 years. Should I? Maybe "people like me" have cable TV. Should I? Do "people like me" have weddings that cost $10,000? Or $30,000? Or $500? Do we go skiing for a week every winter? Do we only buy our clothes at certain stores? Do we send our children to private school? Do we only live in certain neighborhoods? Do we pick up used furniture off the street? Do we have full sets of matching glasses and plates and silverware?

Everyone will have a different perspective on these questions, but I think we can all challenge ourselves to expand the definition of "people like me" to include "people who have less than me" rather than "people who have more than me," and spend less money by eliminating at least one thing in our lives that we think we "should" have, but don't really need.

18 comments:

I lead a fairly minimalist life because I think that one day my savings will pay off, so while others have nice cars, and fancy stuff to fill their house, I'm fine with my mismatched silverware (like yourself), and other odds and ends, until I'm ready to splurge. Watch out when I do though. :)

I think it's so important to question the status quo. I really get a kick out of the reaction I get from some people when I tell them that I don't have television. I have a television, but I get no reception without cable, and I'm not willing to pay for cable; thus, no television.

You'd think I said that I dance naked in the town square. Once in a while, someone gets all huffy about it. One guy I know actually devoted some time to pricing out cable packages for me because he couldn't believe that there is no price low enough convince me to pay for television.

GREAT POST! I'm glad that you're putting this post for people to take a moment and reflect on ourselves...we are all blessed and lucky in our own ways and we should cherish every moments we live and breath. Have a great wkend!

This is a wonderful post and has a good finish by listing a set of checks to put in place for oneself. It's always important not to get too caught up with all the material things in life but also be able to enjoy. Don't be possessed by your possessions.

Just what I needed to read - thanks! I was looking at my girlfriends Hawaii vacation pictures earlier and feeling my usual envy over her lifestyle. Now I am reminded, its just my my inner 'Jones' talking!

Lovely post, really. It got me to ponder quite a few things about myself... what I have, what I want, where I want to be in life and in location.

One of big the contributors to the "Jones Complex" I think is television. I haven't had cable in 3 years and spend virtually no time in front of the T.V. Its a time suck and subjects you to more marketing and adverstising than any one person needs to see. I think you worry less about the Jones' and buy less stuff if you don't see them... Just my 2 cents.

I had a television in my college dorm, but I never watched it. It would be turned on about once a month when my boyfriend got the urge to watch something. When I moved into my own place after graduation, I thought it would be ridiculous to get cable when I would obviously never watch it. Everybody was so shocked. My boyfriend's mom was the worst. She just wouldn't let it go and kept thinking that I was in some sort of financial trouble. Since I got married the TV has been a constant, and I seem to be addicted to the stupid thing. I long for the simplicity that was in my life before, but it's hard to kick the TV habit.

One quick comment. I love your blog but I have to criticize your comment that "It's a no-brainer that all Americans are fortunate in relation to others in the world"

I'm a New Yorker as well but have lived overseas in London and Singapore for work. I used to think like you but after living in these cities it really opened my eyes as to how great other places were. First of all places like London and Singapore are just as "western" as the US and frankly the services and utilities were way better. Singapore was 10 times more modern than America and that was when I lived there 5 years ago. Capitalism rules in these places just like it does here and people make tons of money and have great quality of life. I'd say the average Londoner or Singaporean had a much better quality of life than the average American. Largely because of the better amenities and services offered. I love NY and this is home to me, I grew up here and want to retire here, but there are places all over the world where the opportunities are better and the quality of life is far superior.

Anon 12/31-- My comment about Americans being fortunate was not to say we have the best lives of anyone anywhere-- I agree that many other places have a great quality of life that can be argued to be far better than NYC or many places in the USA. What I meant was that Americans in general, even the poorest of us, are fortunate compared to billions of poor people in the developing world.

I am in the Peace Corps and have been reevaluating where I belong for a while now. I hoped to be in the middle of nowhere with basically nothing to see how I would do. Ironically I am in a location that I have all of the comforts of home. Sometimes even more. It is strange because I lived in a small, somewhat country town and now I am in this country's biggest tourist destination. I have learned in my time here roles that I don't want to fill and others that I do. I am glad that I have had this opportunity for my perspective to change and to assist others in changing their own. I will never be able to go on vacation again without asking for a real tour of where I am visiting. I have also come to detest people who "bargain" with a vendor until a price is below the value of the item they are trying to buy. A dollar or two to the vendor could mean the difference between feeding his or her family for few days.

Good post. I often feel somewhat pushed to do things that I don't particularly care about in order--not so much to fit in--but in order to keep up my end of conversations. Like, I'll find myself tuning into "Lost" or some other show about which I don't partuicularly care just so I won't have to sit in silence during lunch while my colleagues dissect the previous night's episode. Not sure there's a way around it--I imagine that it's a small price to build relationships.

About Me

My name is Madame X, and I am a 40-something single woman living in New York's lower Hudson Valley. I write about how much money I make, what I spend it on, how much I save, how I budget, my home-buying experiences, my financial goals and ambitions, my thoughts on class and what it means to be rich or poor, and anything else that relates to money. (More about me here, here, and here.)If you take any of my advice, do so at your own risk as I am not really qualified to give it. If you have advice to share, please do, and many thanks!